This Business News Story Was Uncovered By Us From: https://nopassiveincome.com/fixer-upper-hard-money-loans-for-profitable-real-estate-investment/
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Fixing up a property to sell it at a higher price is generally called flipping. Many people who are already well-versed in selling houses find this a lucrative venture but know that securing the financing for the renovations can be a bit complicated.
It’s where a bridge loan comes in where the borrower uses the property as collateral. They are good tools for those who have poor credit rating, and it offers a flexible funding solution for those who are facing foreclosure.
You’ll find lenders who are not too stringent in their requirements if you need access to capital. However, know that these transactions can only last six to nine months because it’s short-term financing, so you need to know what you’re doing. These are also different compared to mortgages because the repayment terms are shorter where you need to pay the lump sum within 12 months.
Higher interest rates are also charged, and the lender will require a down payment of around 20% to 30% before you can get the amount that you’re asking. Of course, the lenders who specialize in hard money loans are going to give you the funds faster, where the paperwork can be processed in a matter of days compared to the glacial pace that’s often involved in mortgages. This is a must for a competitive market like real estate, where other investors are also always looking out for the best deals out there.
People who believe that there are plenty of opportunities that they can take advantage of in a particular transaction may also use this strategy to have financial backing into their projects. Understand the risks and carefully assess the property before you take it to maximize your chances of success.
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